The currency would initially replace cash, PBOC Deputy Governor Fan Yifei wrote in an article earlier this year. According to patents registered by the central bank, consumers and businesses would download a mobile wallet and swap their yuan for the digital money, which they could use to make and receive payments. Crucially, the PBOC could also track every time money changes hands. Fan suggested in his article that banks would need to submit daily information on transactions and that there would be caps on transactions by individuals. The PBOC declined to comment.

The recruitment drive follows a recent CoinDesk report that the digital currency lab had filed more than 40 patent applications within 12 months of its establishment, which combine to outline the big picture of how the PBoC is approaching its goal.

Each of the application focuses on a certain aspect of a digital currency system. When viewed all together, they describe a technology that issues a digital token and can be stored and transacted in a peer-to-peer fashion.

This is not just a theory. In recent months, it has repeatedly been reported that PBOC is researching and developing its own digital currency. On 5th October, China Finance, PBOC’s official magazine, published an article analyzing the necessity of issuing an official digital currency, starting on a controlled scale. China is well placed to leapfrog to a digital currency and the Chinese government sees great domestic and geopolitical advantages in creating one.

China is already the most cashless large economy in the world, thanks to the duopoly of mobile payment apps - WeChat, by Tencent, and Alibaba’s Alipay. In 2017, the US hosted a total of $337 billion in online payments. In China, it was a whopping $15.7 trillion, $3.2 trillion more than Visa and Mastercard’s combined global volume. But Alibaba and Tencent are not owned by the state and it is highly unlikely the Chinese government will allow such a crucial shift to be controlled by private companies.

I suspect that this would prompt the Trump administration to dust off the 1988 definition of manipulation (weakening a currency to gain a competitive advantage in trade). But that too has problems, as China could respond to concerns that it is guiding its currency down by just letting the yuan float down…the reality now, I think, is that it is in the United States’ interest for China to continue to manage its currency for a while longer.

Yi Gang, PBoC deputy governor who until January was also head of the foreign exchange regulator, said on Sunday that only highly liquid assets are included in the closely watched headline reserves figure.

China does not intend to use a cheaper yuan as a way to boost exports and has the tools to keep the currency stable, Chinese Premier Li Keqiang said in a meeting with the president of the European Bank for Reconstruction and Development, state news agency Xinhua reported Saturday.